Core Viewpoint - Eagle Bancorp, Inc. is under investigation for potential violations of federal securities laws and unlawful business practices, following a significant decline in its financial performance in Q1 2025 [1][3]. Financial Performance - For Q1 2025, Eagle reported a net income of $1.7 million, or $0.06 per diluted share, a substantial decrease from $15.3 million, or $0.50 per diluted share in the previous quarter, marking a decline of $13.6 million [3]. - The decrease in net income was attributed to a $14.1 million increase in provision expense, a $5.1 million decline in net interest income, and a $0.9 million increase in noninterest expenses [3]. - The company's share price fell by $2.41, from $21.19 on April 23, 2025, to $18.78 on April 24, 2025, following the release of its financial results [3]. Investigation Details - The law firm Kirby McInerney LLP is leading the investigation into Eagle Bancorp, focusing on potential claims related to securities law violations and other unlawful practices [1][4]. - Shareholders who purchased or acquired Eagle securities are encouraged to contact the law firm for more information regarding their rights and interests [4]. Company Background - Kirby McInerney LLP is a New York-based plaintiffs' law firm specializing in securities, antitrust, whistleblower, and consumer litigation, with a history of achieving significant recoveries for shareholders [6].

Financial Data and Key Metrics Changes - The company reported net income of $1.7 million for the quarter, a significant decline from $15.3 million in the prior quarter, resulting in earnings per diluted share of $0.06 compared to $0.50 previously [7][29] - The pretax income decreased by $17.3 million to $2.4 million in the first quarter, driven by a higher provision for credit losses, a decline in net interest income, and increased noninterest expenses [29][30] - The allowance for credit losses increased to $129.5 million, representing coverage of total loans at 1.63%, up 19 basis points from the prior quarter [21][31] Business Line Data and Key Metrics Changes - Commercial lending grew by $109.1 million or 4.3% from December 31, 2024, reflecting the impact of new additions to the Commercial & Industrial (C&I) team [11] - Deposits increased by $146.2 million in the first quarter, primarily through time deposits in digital and branch channels, enhancing the bank's liquidity [12][32] - Noninterest income rose to $8.2 million for the first quarter, compared to $4.1 million in the prior quarter, largely due to a $200 million separate account BOLI transaction [36] Market Data and Key Metrics Changes - The company noted modest exposure to government contracting and GSA-linked assets, which reduces sensitivity to changes in federal budget spending [13] - The DC economy is diversified beyond the federal government, including educational institutions, a growing technology sector, and tourism, supporting long-term stability [14] Company Strategy and Development Direction - The company is focused on preserving capital flexibility, improving portfolio quality, and managing through volatility while maintaining long-term franchise value [17][28] - There is an emphasis on exploring asset disposition strategies for office loans to address evolving valuation risks [15][16] - The company aims to deepen relationship-based deposits and drive operational excellence despite challenges in asset quality and valuation pressures [41][42] Management's Comments on Operating Environment and Future Outlook - Management acknowledged sustained pressure on office property valuations and the need for adequate reserves to absorb potential losses [15][17] - The outlook for net interest margin (NIM) is being adjusted downward due to higher funding costs, but there is optimism for improvement as funding costs decrease [35][60] - The company remains confident in its ability to execute strategic priorities and maintain a resilient capital base [18][40] Other Important Information - The company reported a tangible common equity ratio of 11% at quarter-end, with 75% of total deposits insured, reflecting a stable funding base [31][32] - The average deposits grew by $381.6 million from a year ago during the first quarter of 2024 [32] Q&A Session Summary Question: Insights on Office Portfolio Reserve Drivers - Management explained that the reserve build was driven by updated assumptions regarding probability of default and loss given default based on recent appraisals, leading to a $14.3 million increase in the allowance for credit losses related to the office portfolio [46][48] Question: Impact of Government Contracting on Credit - Management noted that the government contracting portfolio is modest, with ongoing communication with clients to assess potential impacts from federal budget changes [55][56] Question: NIM Expansion Assumptions - Management indicated that the forecast for NIM does not include Fed rate cuts and is driven by a new pricing structure for third-party payment processing and redeployment of funds into higher-earning assets [57][60] Question: Office Portfolio Appraisal Updates - Management confirmed that appraisals for the office portfolio are conducted proactively, with updates provided as necessary [100][102] Question: Growth in C&I Portfolio - Management expressed optimism about the growth in the C&I pipeline, attributing it to new team members and increased activity [104][105]

Financial Data and Key Metrics Changes - The company reported net income of $1,700,000 for the quarter, reflecting continued earnings pressure compared to $15,300,000 in the prior quarter [5][18] - Pre-tax income declined by $17,300,000 to $2,400,000 in the first quarter, driven by a higher provision for credit losses, a decline in net interest income, and increased non-interest expenses [18] - The allowance for credit losses increased to $129,500,000, representing coverage of total loans at 1.63%, up 19 basis points from the prior quarter [13][19] - Net interest income before provision totaled $65,600,000, decreasing from $70,800,000 in the prior quarter due to lower average interest-bearing cash balances and lower rates on loans [21] - The tangible common equity ratio decreased by two basis points to 11% at quarter end, while book value per share increased by $0.39 to $40.99 [20] Business Line Data and Key Metrics Changes - The commercial lending platform saw loans grow by $109,100,000 or 4.3% over the previous quarter [7] - Deposits grew by $146,200,000, largely through time deposits in digital and branch channels, enhancing the bank's liquidity strength [8] - Non-interest income increased to $8,200,000 for the first quarter, compared to $4,100,000 in the prior quarter, primarily driven by a separate account BOLI transaction [24] Market Data and Key Metrics Changes - The DC economy is diversified beyond the federal government, including educational institutions, a growing technology sector, and tourism, which supports long-term stability [9] - The company has modest exposure to government contracting and GSA-linked assets, reducing sensitivity to changes in federal budget spending [8] Company Strategy and Development Direction - The company is focused on preserving capital flexibility, improving portfolio quality, and managing through volatility while maintaining long-term franchise value [11][27] - There is an emphasis on executing a disciplined strategy to enhance franchise value and position the company as a leading community bank in the Greater Washington DC Metro Area [7][9] - The company plans to explore asset disposition strategies for office loans to address evolving valuation risks [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledges sustained pressure on office property valuations and the need for adequate reserves in light of market uncertainties [10][11] - The company remains optimistic about the long-term strength of the Washington DC region despite current challenges [10] - Management is actively reassessing capital allocation priorities, including shareholder return strategies, to align with forward-looking earnings [11] Other Important Information - The company has a strong capital position, with Tier one leverage increasing by 37 basis points to 11.11% [19] - Average deposits have grown by $381,600,000 from a year ago, reflecting a stable funding base [20] - The company is seeing a robust pipeline in its C and I lending, indicating potential growth in that area [76] Q&A Session Summary Question: Can you provide more details on the reserve build related to the office portfolio? - The reserve increase was driven by updated assumptions regarding probability of default and loss given default, resulting in a $14,300,000 increase to the allowance for credit losses related to the performing office portfolio [34][36] Question: What is the outlook for the C and I portfolio growth? - All indications point to an increase in the C and I portfolio growth, supported by new team members and a robust pipeline [75][78] Question: How sensitive is the margin guidance to potential Fed rate cuts? - The forecast does not include changes to Fed rate cuts, and the company is relatively neutral to interest rate movements due to its loan book structure [42][43]

Financial Data and Key Metrics Changes - The company reported net income of $1,700,000 for the quarter, reflecting continued earnings pressure compared to $15,300,000 in the prior quarter [6][21] - The provision for credit losses increased to $26,300,000, with $13,900,000 related to the increase in the office overlay [15][21] - The allowance for credit losses rose to $129,500,000, representing coverage of total loans at 1.63%, an increase of 19 basis points from the prior quarter [15][22] - Net interest income before provision totaled $65,600,000, decreasing from $70,800,000 in the prior quarter [24] - The tangible common equity ratio decreased two basis points to 11% at quarter end, while book value per share increased by $0.39 to $40.99 [22][23] Business Line Data and Key Metrics Changes - Commercial lending grew by $109,100,000 or 4.3% over the previous quarter, indicating positive momentum in this segment [9] - Deposits increased by $146,200,000, largely through time deposits in digital and branch channels [10] - Non-interest income rose to $8,200,000 for the first quarter, compared to $4,100,000 in the prior quarter, driven by a separate account BOLI transaction [27][28] Market Data and Key Metrics Changes - The company noted modest exposure to government contracting and GSA-linked assets, which reduces sensitivity to changes in federal budget spending [10] - The DC economy is diversified, including educational institutions, a growing technology sector, and tourism, supporting long-term stability [11] Company Strategy and Development Direction - The company is focused on preserving capital flexibility, improving portfolio quality, and managing through volatility while maintaining long-term franchise value [13][30] - There is an emphasis on executing a disciplined strategy to enhance franchise value and position the company as a leading community bank in the Greater Washington DC Metro Area [9][11] - The company plans to explore asset disposition strategies for office loans to address evolving valuation risks [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged sustained pressure on office property valuations and the need for adequate reserves [12] - The company remains optimistic about the long-term strength of the Washington DC region despite current uncertainties [11][30] - Management is actively reassessing capital allocation priorities, including shareholder return strategies, in light of credit conditions [13] Other Important Information - The company has a strong liquidity position with available liquidity totaling $4,800,000,000 [24] - The average deposits have grown by $381,600,000 from a year ago, reflecting a stable funding base [23] Q&A Session Summary Question: Can you provide more details on the reserve build related to the office portfolio? - The reserve increase was driven by actual appraisal experiences and updated assumptions regarding probability of default and loss given default [36][37] Question: What is the outlook for the C and I portfolio growth? - All indications point to an increase in the C and I portfolio growth due to new team members and a robust pipeline [79][80] Question: How sensitive is the margin outlook to potential Fed rate cuts? - The forecast does not include changes to Fed rate cuts, and the company is relatively neutral to interest rate movements in the short term [43][46] Question: What is the company's strategy regarding loan sales and resolutions? - The company is considering various strategies, including loan sales and aggressive resolutions, based on a cost-benefit analysis [72][73]

Core Insights - Eagle Bancorp reported revenue of $73.86 million for the quarter ended March 2025, reflecting a year-over-year decline of 5.7% [1] - The earnings per share (EPS) for the same period was $0.06, compared to -$0.01 a year ago, indicating a positive turnaround [1] - The reported revenue was a surprise of -2.81% compared to the Zacks Consensus Estimate of $75.99 million [1] - The EPS surprise was -86.96% against the consensus estimate of $0.46 [1] Key Metrics - Net Interest Margin was reported at 2.3%, slightly below the average estimate of 2.4% from two analysts [4] - The Efficiency Ratio stood at 61.5%, higher than the average estimate of 58.8% from two analysts [4] - Total noninterest income was $8.21 million, exceeding the average estimate of $4.31 million from two analysts [4] - Net Interest Income was reported at $65.65 million, below the average estimate of $71.69 million from two analysts [4] Stock Performance - Eagle Bancorp's shares have returned -3.7% over the past month, compared to a -6.6% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Group 1 - Eagle Bancorp reported quarterly earnings of $0.06 per share, missing the Zacks Consensus Estimate of $0.46 per share, and compared to a loss of $0.01 per share a year ago, representing an earnings surprise of -86.96% [1] - The company posted revenues of $73.86 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 2.81%, and down from year-ago revenues of $78.29 million [2] - Eagle Bancorp shares have declined approximately 19.9% since the beginning of the year, while the S&P 500 has declined by -10.1% [3] Group 2 - The current consensus EPS estimate for the coming quarter is $0.53 on revenues of $79.32 million, and for the current fiscal year, it is $2.31 on revenues of $323.6 million [7] - The Zacks Industry Rank for Banks - Northeast is currently in the top 23% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] Group 3 - The estimate revisions trend for Eagle Bancorp is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it is expected to perform in line with the market in the near future [6]

[Company Overview](index=3&type=section&id=Company%20Overview) Eagle Bancorp, Inc. is a prominent financial institution in the Washington D.C. metro area, holding a strong market position with over $11 billion in assets [Company Snapshot and Market Position](index=3&type=section&id=Company%20Snapshot%20and%20Market%20Position) Eagle Bancorp, Inc. is a significant financial institution headquartered in the Washington D.C. metropolitan area, holding a strong market position by deposit market share - Operates in the attractive Washington D.C. metropolitan market, which features a dynamic mix of public and private sector activity and high household incomes[8](index=8&type=chunk) - Ranks as one of the largest banks headquartered in the Washington D.C. area and is **3rd by deposit market share** for banks under **$15 billion in assets**[9](index=9&type=chunk) Eagle Bancorp at a Glance (as of March 31, 2025) | Metric | Value | | :--- | :--- | | Total Assets | $11.1 billion | | Total Deposits | $9.3 billion | | Total Loans | $7.9 billion | | Shares Outstanding | 30,368,843 | | Market Capitalization | $633 million (as of April 22, 2025) | | Tangible Book Value per Common Share | $40.59 | [Investment Highlights and Strategy](index=5&type=section&id=Investment%20Highlights%20and%20Strategy) Eagle Bancorp offers an attractive investment opportunity due to its strong capital, liquidity, disciplined cost structure, and strategic profitability initiatives [Investment Thesis and Key Strengths](index=5&type=section&id=Investment%20Thesis%20and%20Key%20Strengths) Eagle Bancorp presents an attractive investment opportunity due to its best-in-class capital levels, strong liquidity, disciplined cost structure, and strategic D.C. geography - Boasts best-in-class capital levels with a **CET1 Ratio of 14.61%**, placing it in the top quartile of bank holding companies with over **$10 billion in assets**[14](index=14&type=chunk) - Maintains a strong liquidity position, with a liquid assets to total deposits ratio of **7.3%** and total available liquidity of **$4.8 billion**; uninsured deposits represent only **25%** of total deposits[14](index=14&type=chunk) - Operates with a disciplined, branch-light cost structure, reflected in an Operating Noninterest Expense to Average Assets ratio of **1.52%** and an Operating Efficiency Ratio of **61.5%**[14](index=14&type=chunk) [Strategies for Profitability Improvement](index=6&type=section&id=Strategies%20for%20Profitability%20Improvement) The company focuses on growing and diversifying deposits, expanding its C&I team, and increasing fee income to enhance profitability and improve ROAA - Actively working to grow and deepen relationship deposits to reduce reliance on higher-cost and non-core funding sources[18](index=18&type=chunk) - Expanding the C&I team and building sales behaviors within Treasury Management to accelerate customer acquisition and deepen deposit relationships[16](index=16&type=chunk) - Maintaining pricing discipline on new loans and focusing on operating efficiency to achieve positive operating leverage[18](index=18&type=chunk) - As of Q1 2025, Eagle's **ROAA of 0.06%** is significantly lower than its peer group median[16](index=16&type=chunk) [Peer Comparison: Capital and Liquidity](index=7&type=section&id=Peer%20Comparison%3A%20Capital%20and%20Liquidity) Compared to its peers, Eagle Bancorp demonstrates superior capital and liquidity, with a high CET1 ratio and robust cash equivalents to total deposits - Capital ratios are high relative to peers, with a **CET1 ratio of 14.6%** and an Excess CET1 (over 9%) plus ACL to Total Loans ratio of **8.2%**, both ranking near the top of the peer group[20](index=20&type=chunk)[22](index=22&type=chunk) - The ratio of Cash Equivalents + AFS Securities to Total Deposits stands at **20.4%**, which is strong compared to the peer median[24](index=24&type=chunk) - Insured deposits constitute **74%** of total deposits as of Q1 2025, enhancing funding stability[24](index=24&type=chunk) [Q1 2025 Financial Performance and Outlook](index=9&type=section&id=Q1%202025%20Financial%20Performance%20and%20Outlook) Q1 2025 saw decreased net income and compressed net interest margin, with updated 2025 outlook reflecting revised NIM and increased noninterest income [Key Performance Ratios](index=9&type=section&id=Key%20Performance%20Ratios) In Q1 2025, key performance metrics showed mixed results, with decreased operating returns but a stable tangible common equity to tangible assets ratio Quarterly Performance Trends | Metric | Q4 2024 | Q1 2025 | Trend | | :--- | :--- | :--- | :--- | | Operating Return on Avg Tangible Common Equity | 4.94% | 0.55% | Decreased | | Operating Return on Assets | 0.48% | 0.06% | Decreased | | Operating Efficiency Ratio | 59.5% | 61.5% | Increased (Worsened) | | Tangible Common Equity / Tangible Assets | 11.02% | 11.00% | Stable | [Net Interest Income and Margin](index=10&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest income and margin compressed slightly in Q1 2025 due to fewer days and lower cash balances, partially offset by reduced borrowing costs Net Interest Income and Margin (QoQ) | Metric | Q4 2024 | Q1 2025 | | :--- | :--- | :--- | | Net Interest Income | $70.8 million | $65.6 million | | Net Interest Margin (NIM) | 2.29% | 2.28% | - The decrease in NII was driven by lower interest income (**$9.1 million** decrease, mainly from volume) and a smaller decrease in interest expense (**$2.8 million** decrease, mainly from yield)[33](index=33&type=chunk)[34](index=34&type=chunk) - Management expects cash flows from the investment portfolio of **$292 million** for the remainder of 2025 to be redeployed at higher yields[34](index=34&type=chunk) [Net Income Summary](index=11&type=section&id=Net%20Income%20Summary) Net income significantly decreased in Q1 2025, driven by lower net interest income and a substantial increase in the provision for credit losses Net Income Drivers (Q4 2024 vs Q1 2025) | Component | Change (in thousands) | Reason | | :--- | :--- | :--- | | Net Interest Income | $(5,145) | Fewer days in quarter, lower cash balances | | Provision for Credit Losses | $(14,123) | Increased reserve for net charge-offs and higher overlay for CRE office risk | | Noninterest Income | $4,140 | Increase in income from a new BOLI policy | | Noninterest Expense | $(1,238) | Increased legal and professional fees | [2025 Company Outlook](index=12&type=section&id=2025%20Company%20Outlook) The company updated its 2025 outlook, projecting a downward revision for net interest margin but an upward revision for noninterest income due to a Q1 gain Current 2025 Outlook | Key Driver | Current 2025 Outlook | | :--- | :--- | | **Balance Sheet** | | | Average deposits | 1-4% increase | | Average loans | 2-5% increase | | **Income Statement** | | | Net interest margin | 2.35% - 2.50% (Revised Down) | | Noninterest income | $35 - $40 million (Revised Up) | | Noninterest expense | 3-5% growth | [Balance Sheet and Funding](index=13&type=section&id=Balance%20Sheet%20and%20Funding) The balance sheet reflects increased deposits and stable loans, with a focus on managing funding costs and optimizing the investment portfolio for higher yields [Deposit and Funding Profile](index=13&type=section&id=Deposit%20and%20Funding%20Profile) Total deposits increased year-over-year to $9.3 billion, with a shift in mix and rising costs, while the company maintains significant available liquidity - Period-end deposits were **$9.3 billion**, up **$776 million** from Q1 2024, driven by growth in money market and CD accounts[43](index=43&type=chunk)[51](index=51&type=chunk) - The cost of total deposits increased to **3.40%** in Q1 2025, up from **3.17%** in Q4 2024 and **3.36%** in Q1 2024[45](index=45&type=chunk) - The company has ample access to liquidity, with over **$4.8 billion** available from the FHLB, FRB Discount Window, cash, and unencumbered securities[49](index=49&type=chunk)[53](index=53&type=chunk) [Loan Portfolio Composition and Yields](index=18&type=section&id=Loan%20Portfolio%20Composition%20and%20Yields) Total loans remained stable at $7.9 billion, with CRE as the largest segment, and a slight increase in total loan yield contributing to stable earning asset yield Loan Portfolio Composition (March 31, 2025) | Loan Category | % of Total Loans | | :--- | :--- | | Total Income Producing CRE | 50% | | Owner-occupied - commercial real estate | 18% | | Construction - commercial and residential | 15% | | Commercial (C&I) | 15% | | Other | 2% | Quarterly Yield Analysis | Yield | Q4 2024 | Q1 2025 | | :--- | :--- | :--- | | Total Loan Yield | 6.91% | 6.93% | | Securities Yield | 2.01% | 2.04% | | Total Earning Asset Yield | 5.71% | 5.71% | [Investment Portfolio](index=32&type=section&id=Investment%20Portfolio) The investment portfolio, primarily Agency MBS and Debentures, decreased due to paydowns, with projected cash flows expected to be reinvested at higher yields - The portfolio is dominated by Agency MBS (**57%**) and Agency Debentures (**25%**)[118](index=118&type=chunk) - Total securities decreased by **$98 million** from 12/31/2024 due to principal paydowns and sales[120](index=120&type=chunk) - Projected cash flow for the remainder of 2025 is **$292 million**, which is expected to be reinvested at higher yields[120](index=120&type=chunk) [Asset Quality and Credit Risk](index=19&type=section&id=Asset%20Quality%20and%20Credit%20Risk) Asset quality metrics deteriorated in Q1 2025, marked by increased provisions, higher net charge-offs, and a rise in criticized and nonaccrual loans [Key Asset Quality Metrics](index=20&type=section&id=Key%20Asset%20Quality%20Metrics) Asset quality metrics deteriorated in Q1 2025, with significant increases in provision for credit losses, net charge-offs, and non-performing assets Quarterly Asset Quality Trends | Metric | Q4 2024 | Q1 2025 | Trend | | :--- | :--- | :--- | :--- | | Provision for Credit Losses | $10.1 million | $35.2 million | Increased | | NCO / Average Loans (annualized) | 0.57% | 1.07% | Increased (Worsened) | | NPAs / Assets | 1.22% | 1.81% | Increased (Worsened) | | ACL / Loans HFI | 1.40% | 1.63% | Increased | [Classified, Criticized, and Nonaccrual Loans](index=19&type=section&id=Classified%2C%20Criticized%2C%20and%20Nonaccrual%20Loans) Criticized and classified loans increased in Q1 2025, primarily due to CRE downgrades, with nonaccrual loans concentrated in office and assisted living sectors - Total criticized and classified loans (Special Mention + Substandard) increased by **$104 million** quarter-over-quarter to **$775 million**[72](index=72&type=chunk) - The increase in Special Mention loans was driven by C&I, while the increase in Substandard loans was driven by CRE[74](index=74&type=chunk) Top Nonaccrual Loans (as of March 31, 2025) | | Purpose/Location | Balance ($000s) | % Total NPLs | | :--- | :--- | :--- | :--- | | 1 | Office - Montgomery | $73,942 | 36.9% | | 2 | Office - Washington DC | $24,660 | 12.3% | | 3 | Office - Fairfax | $18,502 | 9.2% | | 4 | Assisted Living - Montgomery | $17,934 | 8.9% | | 5 | Land - Fairfax | $16,755 | 8.4% | [Detailed Loan Portfolio Review](index=15&type=section&id=Detailed%20Loan%20Portfolio%20Review) This section provides a detailed review of the loan portfolio, focusing on the performance and risk profiles of CRE Office, Multifamily, Construction, Hotel, and GovCon segments [Commercial Real Estate (CRE) - Office](index=15&type=section&id=Commercial%20Real%20Estate%20%28CRE%29%20-%20Office) The CRE Office portfolio, totaling $994.3 million, shows risk rating deterioration and a significant maturity wall, with limited exposure to lower-class properties CRE Office Portfolio Overview (as of March 31, 2025) | Category | Balance ($M) | of Loans | % Criticized/Classified | | :--- | :--- | :--- | :--- | | Owner Occupied Office | $145.0 | 92 | 1% | | Income Producing Office | $849.3 | 72 | 30% | | **Total CRE Office** | **$994.3** | **164** | **31%** | - The risk rating for the non-office portion of the income-producing CRE portfolio has remained largely unchanged, while the office portion has seen risk rating deterioration[55](index=55&type=chunk) - A significant portion of the income-producing office portfolio matures in the near term, with **23.8%** maturing by YE 2025 and an additional **37.9%** in 2026[59](index=59&type=chunk) [Commercial Real Estate (CRE) - Multifamily](index=17&type=section&id=Commercial%20Real%20Estate%20%28CRE%29%20-%20Multifamily) The income-producing Multifamily CRE portfolio, totaling $837.0 million, exhibits strong credit quality with high 'Pass' ratings and no non-accrual loans Income Producing Multifamily Portfolio (as of March 31, 2025) | Metric | Value | | :--- | :--- | | Total CRE Balance | $837.0 million | | of Loans | 43 | | % Pass Rated | 92% | | % Criticized | 8% | | Non-Accrual % | 0% | | Weighted LTV | 63% | | Weighted DSCR | 1.2x | - There are zero multifamily loans on nonaccrual status; however, there are **4 substandard loans** totaling **$50.2 million** and **2 special mention loans** totaling **$31.7 million**[102](index=102&type=chunk) [Other Portfolios (CRE Construction, Hotel, GovCon)](index=28&type=section&id=Other%20Portfolios%20%28CRE%20Construction%2C%20Hotel%2C%20GovCon%29) Other specialized portfolios, including CRE Construction, Hotel, and GovCon, generally exhibit strong credit quality with high 'Pass' ratings and low non-accrual rates - **CRE Construction:** **$1.13 billion** total balance across 90 loans; 85 loans (**$1.1 billion**) are risk-rated 'Pass', while 5 loans (**$38.0 million**) have adverse risk ratings[109](index=109&type=chunk)[110](index=110&type=chunk)[113](index=113&type=chunk) - **Hotel:** **$431.5 million** outstanding balance across 21 loans; all loans are risk-rated 'Pass' with zero nonaccrual or criticized loans[116](index=116&type=chunk) - **GovCon:** Less than **$250 million** outstanding balance; there are zero GovCon loans on nonaccrual status, and over **30%** of balances are tied to ABL-structured lines of credit[105](index=105&type=chunk) [Appendices](index=21&type=section&id=Appendices) The appendices offer supplementary financial details, including granular loan schedules, tangible book value analysis, and non-GAAP reconciliations for enhanced transparency [Detailed Loan Schedules](index=22&type=section&id=Detailed%20Loan%20Schedules) The appendices provide granular detail on specific loan categories, including nonaccrual, special mention, substandard, and top 25 loans, with geographic breakdowns - Provides a detailed breakdown of the **8 largest nonaccrual loans**, which total **$191.4 million**, or **95.5%** of all nonaccrual loans; several were placed on nonaccrual due to new appraisals, not payment default[85](index=85&type=chunk)[86](index=86&type=chunk) - Lists **9 Special Mention loans** over **$10 million** (totaling **$245.3 million**) and **15 Substandard loans** over **$10 million** (totaling **$380.7 million**), with details on collateral, LTV, and DSCR[87](index=87&type=chunk) - The top 25 loans total **$1.62 billion**, representing **20.3%** of the total loan portfolio; the largest single exposure is a **$93.9 million** construction loan for an apartment building[89](index=89&type=chunk) [Tangible Book Value Per Share Analysis](index=33&type=section&id=Tangible%20Book%20Value%20Per%20Share%20Analysis) Tangible book value per share was $40.59, showing a slight quarterly decrease due to dividends and AOCI, but a long-term CAGR of 3.3% Q1 2025 TBV per Share Walk | Component | Per Share Amount | | :--- | :--- | | 12/31/24 TBVPS | $40.99 | | Net Income | $0.06 | | Dividend | $(0.165) | | AOCI & Other | $(0.30) (Calculated) | | **3/31/25 TBVPS** | **$40.59** | - Tangible book value per share has shown a compound annual growth rate (CAGR) of **3.3%** from **$35.74** at year-end 2020 to **$40.59** at the end of Q1 2025[123](index=123&type=chunk) [Non-GAAP Reconciliation](index=37&type=section&id=Non-GAAP%20Reconciliation) This section reconciles non-GAAP financial measures like Tangible Common Equity and Operating Net Income to GAAP equivalents, providing clearer insights into performance - Reconciles GAAP Net Income to Operating Net Income, which primarily adjusts for a one-time goodwill impairment charge of **$104.2 million** taken in Q2 2024[129](index=129&type=chunk)[133](index=133&type=chunk) - Provides calculations for tangible common equity and tangible assets by subtracting intangible assets from their corresponding GAAP measures[129](index=129&type=chunk)[133](index=133&type=chunk) - Details the calculation of the Operating Efficiency Ratio by dividing Operating Noninterest Expense by operating revenue (Net Interest Income + Noninterest Income)[131](index=131&type=chunk)[135](index=135&type=chunk)

Core Viewpoint - Eagle Bancorp, Inc. reported a significant decline in net income for the first quarter of 2025, primarily due to increased provision expenses and a decrease in net interest income, while also announcing a cash dividend for shareholders [2][3][4]. Financial Performance - Net income for Q1 2025 was $1.7 million, or $0.06 per diluted share, down from $15.3 million, or $0.50 per diluted share in Q4 2024 [2][3]. - Pre-provision net revenue (PPNR) decreased to $28.4 million from $30.3 million in the previous quarter [2]. - The provision for credit losses increased to $26.3 million from $12.1 million in the prior quarter [3][6]. Income and Expenses - Net interest income fell to $65.6 million from $70.8 million in the previous quarter, attributed to lower average interest-bearing cash balances and a higher mix of interest-bearing deposits [6][8]. - Noninterest income rose to $8.2 million from $4.1 million, driven by a $200 million separate account BOLI transaction [6][8]. - Noninterest expenses increased to $45.5 million from $44.5 million, mainly due to higher legal and professional fees [8]. Asset Quality - Nonperforming assets decreased by $8.5 million to $202.9 million, representing 1.79% of total assets, down from 1.90% [7][13]. - The allowance for credit losses as a percentage of total loans rose to 1.63% from 1.44% [7][13]. - Annualized net charge-offs for Q1 were 0.57%, compared to 0.48% in Q4 2024 [7]. Loan and Deposit Growth - Total loans were $7.9 billion, a slight increase of 0.1% from the prior quarter [13]. - Total deposits grew by $146.2 million, or 1.6%, to $9.3 billion, primarily due to an increase in time deposit accounts [13]. - The company reported a solid growth in its commercial and industrial (C&I) portfolio, which increased by $109 million, or 4.3% [4]. Capital Position - The common equity tier one capital ratio stood at 14.6%, with a tangible common equity ratio exceeding 10% [4][7]. - Total shareholders' equity increased by 1.5% to $1.2 billion, driven by an increase in valuations of available-for-sale securities [13].

Core Viewpoint - Eagle Bancorp, Inc. will host a teleconference on April 24, 2025, to discuss its first quarter 2025 financial results, which will be released on April 23, 2025 [1] Group 1: Teleconference Details - The teleconference will feature CEO Susan Riel and CFO Eric Newell discussing the earnings [1] - Interested parties must register to participate, receiving a dial-in number and unique PIN [2] - The call will also be available via live webcast on the Company's website, with a replay accessible until May 8, 2025 [2] Group 2: Company Overview - Eagle Bancorp, Inc. is the holding company for EagleBank, which began operations in 1998 [4] - The bank is headquartered in Bethesda, Maryland, and operates 12 offices in Suburban Maryland, Washington, D.C., and Northern Virginia [4] - EagleBank focuses on building relationships with businesses, professionals, and individuals in its marketplace [4]

Financial Performance - The net loss for the year ended December 31, 2024, was $47.0 million, compared to a net income of $100.5 million for the same period in 2023, primarily due to a goodwill impairment of $104.2 million[272]. - The efficiency ratio significantly worsened to 88.99% in 2024 from 49.12% in 2023, reflecting increased operational costs[266][271]. - Net interest income decreased to $288.7 million for 2024, a 1% decline from $290.5 million in 2023, primarily due to increased interest expenses on deposits and borrowings[284]. - Total noninterest income in 2024 was $19.9 million, representing a 7% decrease from $21.5 million in 2023[284]. - The return on average assets (ROAA) was (0.38)% in 2024, down from 0.84% in 2023, primarily due to the goodwill impairment[282]. Asset and Loan Portfolio - As of December 31, 2024, the Company had total assets of approximately $11.1 billion, total loans of $7.9 billion, and total deposits of $9.1 billion[248]. - Total assets decreased from $11.66 billion in 2023 to $11.13 billion in 2024, a reduction of approximately 4.5%[265]. - The loan portfolio remained relatively flat at $7,934,888 thousand as of December 31, 2024, a decrease of $33,807 thousand or 0.4% from $7,968,695 thousand in 2023[333]. - The composition of the loan portfolio includes 83% related to real estate, with 66% being non-owner occupied commercial real estate as of December 31, 2024[334]. - The Company maintained a commercial real estate (CRE) loan portfolio of $6.5 billion, representing 81.5% of total loans, compared to $6.1 billion or 77.0% at December 31, 2023[340]. Credit Losses and Allowance - The provision for credit losses increased by $34.8 million, totaling $66.4 million for 2024, compared to $31.5 million in 2023[265][272]. - The allowance for credit losses increased to $114.4 million in 2024, up from $85.9 million in 2023, reflecting a higher risk environment[265]. - Nonperforming assets and loans 90+ days past due rose to $211.4 million, representing 1.90% of total assets, compared to 0.57% in 2023[266]. - The Company recorded net charge-offs of $38.6 million in 2024, up from $18.9 million in 2023, reflecting increased credit losses[266]. - The coverage ratio for allowance for credit losses to total nonperforming loans decreased to 55% in 2024 from 131% in 2023[376]. Deposits and Funding - Total deposits reached $9.1 billion at December 31, 2024, marking a 4% increase from $8.8 billion in 2023, driven by a $558.2 million rise in interest-bearing time deposits[387]. - Noninterest-bearing deposits fell by $734.7 million, or 32%, to $1.5 billion in 2024, while interest-bearing deposits increased by $499.5 million, or 12%[388]. - Brokered deposits increased to $4.0 billion, or 43.61% of total deposits, as of December 31, 2024, compared to $2.5 billion, or 28.8% of total deposits, in 2023[393]. - The Company had total borrowings of $600.8 million, a decrease from $1.4 billion in 2023, reflecting a strategic shift in funding sources[398]. - The average daily balance of customer repurchase agreements increased to $37.9 million in 2024 from $36.7 million in 2023[398]. Market Conditions and Economic Outlook - The Company experienced a 3.1% real U.S. GDP growth in 2024, compared to 3.3% growth in 2023, despite inflationary pressures and higher interest rates[245]. - The unemployment rate in the U.S. increased to 4.0% at the end of 2024, up from 3.7% at the end of 2023[245]. - The ten-year U.S. Treasury rate averaged 4.21% in 2024, up from 3.96% in 2023, indicating an increase in longer-term interest rates[246]. - The Federal Reserve decreased interest rates by a total of 100 basis points in September 2024 and the fourth quarter, which had minimal impact on net interest margin for most of the year[428]. - The Company remains cautious regarding commercial real estate market conditions, particularly in the office sector, while noting resilience in the multi-family commercial real estate sector[247]. Strategic Initiatives - The Company’s strategy focuses on growth, retaining talented staff, and building quality lending and deposit relationships, which has fostered future growth opportunities[251]. - The Company has implemented risk management procedures and underwriting criteria to address risks in its commercial real estate portfolio[344]. - The Company expects to maintain heightened risk management procedures due to its commercial real estate concentration[434].